Online travel sites win round in hotel-tax dispute

Broward County has lost a round in its long-standing legal dispute for online travel companies such as Expedia to pay more tax on the hotel rooms they book.

Broward and other Florida counties have sued the travel websites to pay "bed tax" on the higher retail value that customers pay for the rooms, not the lower wholesale value that the companies pay to hotels.

After hearing arguments last month, Florida Circuit Judge Terry Lewis ruled Friday that the online companies owe the taxes on the lower rate that they now pay.

The decision could affect millions of dollars in past and future tax revenue that counties seek in the dispute.

Officials from Broward now must decide their next move that could include an appeal or other options.

The industry group representing online travel companies suggests local governments give up the fight that already has cost counties millions of dollars in legal expenses.

"Municipalities should not waste public resources on wasteful litigation that only undermines a key industry that generates tourism, jobs and economic activity," Joseph Rubin, president of Interactive Travel Services Association, said in a prepared statement issued late Monday.

In May, Broward reached an agreement with online travel company Travelocity to pay the county $400,000 to settle their dispute. Travelocity admitted no liability for past or future bed taxes.

Palm Beach County in January reached a settlement for online travel companies to pay nearly $2 million in the dispute. That deal gives the Florida Legislature two years to decide how companies should compute the tax. If no law is forthcoming by then, Palm Beach County will proceed with their lawsuit.

Last month, a Florida circuit judge in the Orlando area ruled that the issue is ultimately a decision for lawmakers, not courts. Lawmakers have considered bills for years but have yet to resolve the matter.